Naka metro, Transit station in Mumbai, India

ATKNew Delhi [India], June 21: Indians are becoming more financially literate and looking for ways to ensure a comfortable living long after their working age is up. The Indian government's National Pension System (NPS) has recently gained popularity over the years. With NPS, individuals can contribute towards their retirement and build a corpus of funds to be used in old age.These services can be used by any Indian all employees in private, public (except for those in the armed forces), and unorganised sectors. Under the old pension scheme, subscribers were provided monthly pensions that were typically half the last salary before retirement. But NPS withdrawal or exit offers a subscriber more lucrative options.What is the National Pension System (NPS)?Regulated by the Pension Fund Regulatory and Development Authority (PFRDA), the tax-saving NPS is a boon to many. This pension-cum-invetsment plan allows you to build a reservoir for funds besides substantially reducing your tax liability. You can use the scheme as a tax exemption tool depending on the NPS account you choose NPS Tier 1 or NPS Tier 2. Under the Tier 1 scheme, a subscriber can withdraw 60 per cent of their funds after retirement in a tax-exempt manner.However, the Tier 2 account doesn't offer tax sops except for government employees and is similar to a mutual funds account.The tax-saving NPS also lets subscribers withdraw a maximum of 60 per cent lump sum with tax exemptions the remaining will be used for purchasing annuity plans.New NPS Withdrawal RulesExiting the NPS and choosing annuities used to be a tricky process - largely owing to the lack of financial knowledge among Indians. Moreover, the time taken by annuity service providers (ASPs) often became a hurdle for many.Cognisant of these facts, the PFRDA introduced new rules this year to ease the process. These rules have come into effect since 1st April.Under the new rules, all subscribers are mandated to fill out a common proposal form for exiting the NPS and buying the annuity from the ASP. A direct result of introducing this change is a more streamlined process. There's a catch, though all subscribers must upload their withdrawal and Know Your Customer (KYC) documents. Such a process allows the exit procedure and annuity purchase to run parallelly, thereby reducing time.Moreover, the new rules also mandate NPS users to apply for partial withdrawal through their nodal officers. Moreover, the time limit for NPS withdrawal has also been decreased from T4 to T2. That means that the exit process will now be completed in just two days instead of four days.What Documents Should You Upload?To exit from the tax-saving NPS, the PFRDA has mandated that all subscribers upload the common NPS withdrawal form, identity and address proof. Additionally, a copy of the Permanent Retirement Account Number (PRAN) card and bank account proof is also required. All these documents must be uploaded on the Central Recordkeeping Agency (CRA) user interface before withdrawing the corpus of funds.Process for NPS WithdrawalThanks to the central government's new rules, the process of exiting from NPS has become fairly simple. Below are the steps you must take to initiate the exit and buy the annuity from an ASP.- Step 1: NPS subscribers must log into the CRA system and begin the exit process. Once your request goes through, you will receive OTP authentication messages from the nodal office. However, this step requires you to register a valid phone number and email on the CRA.- Step 2: You must verify personal information such as bank account details, address, and nominee information. The good news is that the portal auto-fills all these details from your NPS account, so you need not waste any more time.- Step 3: You must demarcate the percentage of NPS funds between lump sum withdrawal and annuity. The former requires you to meet certain criteria such as specified reasons (higher education for children is one) and a limited amount (25 percent). The latter lets you choose among annuity schemes. The NPS withdrawal process also enables you to take the complete lump sum at maturity, provided that the total corpus amounts to Rs5 Lakhs or less.- Step 4: Next, your bank account in the CRA will be verified. While taking your exit process to the end, it's important to ensure one crucial step. Don't forget to upload your KYC documents, a copy of PRAN or e-PRAN, and bank account proofs.- Step 5: Authorise the process via OTP verification. Alternatively, you can receive OTP on your mobile number linked to your Aadhaar Card through the e-Sign process.ConclusionThe government has introduced many progressive steps towards easing the financial inclusion of Indians. The new NPS withdrawal rules are an initiative that contributes to that purpose. By following the steps outlined above, you can exit the NPS scheme and enjoy your life after retirement.(Disclaimer: The above press release has been provided by ATK.will not be responsible in any way for the content of the same)Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor

Naka MetroFOLLOW

Naka metro, Latest News

New Delhi [India], June 21 : Crisis-hit airline Go First on Wednesday announced that its scheduled flight operations will ... ...

Mumbai (Maharashtra) [India], June 21 : TV actors Dipika Kakar and Shoaib Ibrahim have been blessed with a son. ... ...

New Delhi, June 21 Popular social media platform Snapchat on Wednesday introduced two new nickname-themed augmented reality (AR) ... ...

Mumbai (Maharashtra) [India], June 21 : Not only Kareena Kapoor but her husband Saif Ali Khan and son Jeh ... ...

BusinessWire India Mumbai (Maharashtra) [India], June 21: Rural-fintech startup Navadhan has raised USD 1.5 million in Seed round led ... ...

Chennai (Tamil Nadu) [India], June 21 : Tamil Nadu Minister Senthil Balaji underwent a bypass surgery on Wednesday at ... ...

BusinessWire India Palo Alto (California) [US], June 21: Uniphore, one of the largest global AI-native conversational AI providers for ... ...

ATK New Delhi [India], June 21: Indians are becoming more financially literate and looking for ways to ensure a ... ...